Kevin Company operates a retail store. All items are sold subject to a 12% value added tax which the entity collects and records as sales revenue. The entity files quarterly sales tax returns when due by the 20th day following the end of the sales quarter. However, in accordance with state requirements, the entity remits value added tax collected by the 20th day of the month following any month if such collections exceed P100,000. The entity takes these payments as credits on the quarterly sales tax return. The value added taxes paid are charged against sales revenue. Following is a monthly summary appearing in the first quarter of 2021 sales revenue account: October November December Debit a. $180,000 b. $216,000 On December 31, 2021, the amount to be reported as valued added taxes payable is: 120,000 C. d. $300,000 $336,000 Credit $1,120,000 784,000 896,000
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- How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.Miyuki Company operates a retail store. All items are sold subject to a 12% value added tax which the entity collects and records as sales revenue. The entity files quarterly sales tax returns when due by the twentieth day following the end of the sales quarter. However, in acordance with state) requirements, the entity remits value added tax collected by the twentieth day of the month following any month such collections exceed P50,000.the entity takes these payments as credits on the quarterly sales tax return. The value added taxes paid are charged against sale)s revenue. Following is a monthly summary sppearing in the first quarter sales revenue for 2017: Credit 580,000 392,000 448,000 Debit January February March 60,000 On March 31, 2017, what amount should be reported as value added taxes payable?Rosen Corporation was formed on December 12, Year 1. It plans to close its books annually each December 31. Rosen is located in Lanmark City and Apple County. The fiscal period of these two governmental units runs from July 1 to June 30. The property tax that they assess on property held on January 1 of each year becomes a lien against the property on July 1. The estimated property taxes for Rosen for the period July 1, Year 2, to June 30, Year 3, are $15,300. The tax bill is mailed in October with a requirement that the tax be paid before December 31. The tax bill received on October 31, Year 2, for Rosen revealed an actual tax of $15,705, and the corporation paid this amount on November 15, Year 2. Rosen elects to record monthly property tax adjustments for interim statements required by management. 1. Prepare the necessary journal entries to record: 1. The monthly property tax adjustments from July Year 2 to October Year 2 2. The payment on November 30, Year 2 (before the November…
- Rosen Corporation was formed on December 12, Year 1. It plans to close its books annually each December 31. Rosen is located in Lanmark City and Apple County. The fiscal period of these two governmental units runs from July 1 to June 30. The property tax that they assess on property held on January 1 of each year becomes a lien against the property on July 1. The estimated property taxes for Rosen for the period July 1, Year 2, to June 30, Year 3, are $15,300. The tax bill is mailed in October with a requirement that the tax be paid before December 31. The tax bill received on October 31, Year 2, for Rosen revealed an actual tax of $15,705, and the corporation paid this amount on November 15, Year 2. Rosen elects to record monthly property tax adjustments for interim statements required by management. 1. Prepare the necessary journal entries to record: 1. The monthly property tax adjustments from July Year 2 to October Year 2 2. The payment on November 30, Year 2 (before the…Sinigang na Baboy Company, a domestic corporation, started operations in the latter part of the first quarter of 2020. The company opted to report its financial statements for the nine months ended December 31, 2020. The pretax financial income for the period was P1,200,000. In preparing the income tax return for the period, the tax accountant determined the following differences between 2020 financial income and taxable income. a. Because of non-compliance with some local government requirements, the city treasurer assessed fines and penalties totaling P22,500. b. The company made a donation to Hospicio de San Jose amounting to P25,000. Tax laws consider a donation of this kind as non-deductible in full amount. c. Cash dividends received from equity investments in a domestic corporation, P5,200. d. Rent was paid in advance for one year amounting to P240,000. The financial statement of Sinigang na Baboy Company reported prepaid rent of P60,000. e. The company uses straight-line…Cromwell Corporation does business in two states, A and B. State A uses an equal-weighted, three-factor apportionment formula and has a 5 percent state tax rate. State B uses an apportionment formula that double-weights the sales factor and has a 6 percent state tax rate. Cromwell's state-level taxable income, before apportionment, is $3.5 million. It has identified the following components of its sales, payroll, and property factors: Sales Payroll Average property Required A Required B State A $ 7,500,000 3,500,000 2,500,000 Required: a. Calculate Cromwell's apportionment factors, income apportioned to each state, and state tax liability. b. State B is considering changing its apportionment formula to place 100 percent of the weight on the sales factor, ignoring payroll and property for apportionment purposes. Given its current levels of activity, what would Cromwell's state tax liability be for each state? Complete this question by entering your answers in the tabs below.…
- Cromwell Corporation does business in two states, A and B. State A uses an equal-weighted, three-factor apportionment formula and has a 5 percent state tax rate. State B uses an apportionment formula that double-weights the sales factor and has a 6 percent state tax rate. Cromwell's state-level taxable income, before apportionment, is $3.5 million. It has identified the following components of its sales, payroll, and property factors: Sales Payroll Average property Required: State A $ 7,500,000 3,500,000 2,500,000 State B $ 4,750,000 2,700,000 1,550,000 Total $ 12,250,000 6,200,000 4,050,000 a. Calculate Cromwell's apportionment factors, income apportioned to each state, and state tax liability. b. State B is considering changing its apportionment formula to place 100 percent of the weight on the sales factor, ignoring payroll and property for apportionment purposes. Given its current levels of activity, what would Cromwell's state tax liability be for each state? Answer is not…Osprey Corporation, an accrual basis taxpayer, reported taxable income for 2021 and paid $15,000 on its estimated state income tax for the year. During 2021, the company received a $1,500 refund upon filing its 2020 state income tax return. The company filed its 2021 state income tax return in August 2022 and paid the $3,750 state income tax due for 2021. In December 2021, the company received a notice from the state tax commission that an additional $2,250 of income tax was due for 2019 because of an error on the return. The company acknowledged the error in December 2021 and paid the additional $2,250 in tax in February 2022. What is Osprey's 2021 Federal income tax deduction for state income taxes?Hunter Company had a FUTA taxable payroll of $192,700 for the year. Since the company is located in a state that has 1.5% FUTA credit reduction due to unpaid loans, determine Hunter's FUTA tax liability for the year.
- Sera Corporation has made and recorded its quarterly income tax payments. After a final review of taxesfor the year, the company identifies an additional $40,000 of income tax expense that should be recorded.A portion of this additional expense, $6,000, is deferred for payment in future years. Record Sera’s yearendadjusting entry for income tax expense.Cromwell Corporation does business in two states, A and B. State A uses an equal-weighted, three-factor apportionment formula and has a 5 percent state tax rate. State B uses an apportionment formula that double-weights the sales factor and has a 6 percent state tax rate. Cromwell's state-level taxable income, before apportionment, is $2 million. It has identified the following components of its sales, payroll, and property factors: Sales Payroll Average property State A $ 6,000,000 2,000,000 1,000,000 Required A Required B Required: a. Calculate Cromwell's apportionment factors, income apportioned to each state, and state tax liability. b. State B is considering changing its apportionment formula to place 100 percent of the weight on the sales factor, ignoring payroll and property for apportionment purposes. Given its current levels of activity, what would Cromwell's state tax liability be for each state? Complete this question by entering your answers in the tabs below. Apportionment…Oldham Incorporated conducts business in State M and State N, which both use the UDITPA three-factor formula to apportion income. State M's corporate tax rate is 4.5 percent, and State N's corporate tax rate is 7 percent. This year, Oldham had the following sales, payroll, and property (in thousands of dollars) in each state: Gross receipts from sales Payroll expense Property costs State M $ 3,000 800 900 State N $ 7,500 1,200 1,000 Total $ 10,500 2,000 1,900 Required: If Oldham's before-tax income was $3 million, compute its State M and State N tax. (Round all apportionment factors to 4 decimal places, e.g., 47.15% would be 0.4715. Enter "Apportionment percentage" and "Tax rate" in decimals and not in percentage. Do not round any intermediate values. Enter your answers in dollars and not in millions or thousands of dollars.)